The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: The news of this Friday; then, breakthroughs in the hunt for the London bombers; a look at winners and losers in the just- passed energy bill; a health report on the latest science of stem cell research, a rundown on what Congress has done in its rush to recess, and analysis of it all by Mark Shields and Ramesh Ponnuru, substituting for David Brooks.

NEWS SUMMARY

JIM LEHRER: Police captured the last of the key suspects today in last week's bombing attempts. Two were caught when officers raided an apartment building in London. The third was arrested in Rome. We have a report from Lindsay Taylor of Independent Television News.

LINDSAY TAYLOR: Officers smash their way into a top floor flat with the smoke could be seen emerging possibly from a stun grenade or tear gas. Then, a defining moment, at the top of the picture, a suspected would-be bomber gives himself up followed by another. Ordered to remove his underwear Muktar Said Ibrahim, the alleged attempted bus bomber; on the right, the Oval Tube Station suspect, both men are spitting, possibly the effects of tear gas, then arms on his head as ordered Ibrahim walks slowly towards the waiting armed officers. Until now, this is the image the world had of Muktar Said Ibrahim, the man suspected of trying to blow up the Number 26 bus in Hackney a week ago and this is the other suspect seen running away from the Oval tube. Just a short distance away the Tavistock Crescent area of West London, another police operation had produced results; another man was detained, believed to be so the far unidentified fifth would-be bomber who abandoned his device at Warmwood Scrubs. In Rome came the reports of the arrest of the final suspect, the attempted bomber of the Shepherds Bush Station, the Italians named him as Osman Hussein. But all the time evidence of the continuing high-alert status of London as Liverpool Street Station was evacuated. Armed police swooped on two women on the concourse who were arrested and are being questioned under the terrorism act.

JIM LEHRER: The fourth suspected bomber from last week was captured on Wednesday. In other developments, it was widely reported police in Zambia detained a British man in the July 7 suicide bombings in London. And in Gonzaga, Brazil, thousands of people turned out for the funeral of a man killed by London police last week. Officers said they mistook him for a suicide bomber. The U.S. Senate gave final approval to a national energy plan today. It was part of a rush of action heading into the August recess. The bill included tax breaks and subsidies to boost energy output and expand alternative sources. Counting revenue offsets, the net cost was more than $12 billion, nearly twice what the president asked. Still, he's expected to sign it. In other action, the House passed a highway and mass transit bill worth nearly $290 billion and sent it to the Senate. And the Senate voted to shield the gun industry from liability involving gun crimes. We'll have more on all of the day's congressional action later in the program tonight. The fight over funding for embryonic stem-cell research took a major turn today. Senate Majority Leader Bill Frist announced he will back legislation to expand the funding. PresidentBush had allowed some federal aid for but for a limited number of stem cell lines. Frist called for allowing the use of more cell lines, but he also acknowledged ethical concerns.

SEN. BILL FRIST: This compels profound questions, moral questions that we understandably struggle with, both as individuals and as a body politic. How we answer these questions today and whether in the end we get them right impacts the promise not only of current research but of future research as well.

JIM LEHRER: The announcement brought support from some in Congress but also sharp criticism, House Majority Leader DeLay and others said they were profoundly disappointed.

REP. TOM DeLAY: As a logical matter, Sen. Frist's position, which declares both profound respect for human life but also support for the federal funding of the -- of its destruction, can be boiled down to the argument that while all human life is precious, some are more precious than others.

JIM LEHRER: A White House spokesman said Frist gave the president advanced notice of his statement, the spokesman said Mr. Bush told him, you've got to vote your conscience. We'll have more about stem cell science and politics later in the program. A suicide bomber killed at least 25 people in northern Iraq today; 35 others were wounded. It happened near the Syrian border. The attacker blew himself up in a group of Iraqi army recruits. In the West, two U.S. Marines died in fighting yesterday. The U.S. Military said nine insurgents were killed as well. All told, nearly 1,800 Americans have died in the Iraq War; more than 13,650 have been wounded. The North Korea nuclear talks were extended into the weekend today amid potentially hopeful signs. U.S. and North Korean officials met again at the six-nation talks in Beijing. And there was word the parties might draft a joint statement tomorrow. U.S. Envoy Christopher Hill said the conference had entered "a new phase." But he also said, "A lot of differences remain." There were growing indications today President Bush may bypass Congress and install John Bolton as U.N. Ambassador. It would be a temporary appointment without Senate confirmation, and it would be good only through next year. White House Spokesman Scott McClellan joined other officials today in underscoring the need for action.

SCOTT McCLELLAN: Any decision on any recess appointment would be made by the President of the United States. That's his decision to make, and it would be his announcement to make when he's ready to do so. Now in terms of this position, there is a vacancy at the United Nations for our ambassador. We need our permanent representative in place at the United Nations at this critical time.

JIM LEHRER: Democrats warned against a recess appointment and cited a new concern. Bolton has now acknowledged he failed to tell Congress he was questioned in a probe of the pre-war intelligence on Iraq. The State Department said last night he had not remembered being questioned. The head of NASA held out hope today of another shuttle launch this year. Officials have grounded the program until they stop large pieces of foam insulation from breaking off during launch. Today NASA administrator Michael Griffin insisted they'll fix the problem. And he said, "We don't expect this to be a long, drawn-out affair." As many as four sizeable pieces of debris broke away during Discovery's launch on Tuesday. There was no sign of significant damage. The AFL-CIO lost another key union today. The United Food and Commercial Workers announced it's leaving the labor federation. The Teamsters and theService Employees bolted earlier this week. The dissident unions represent nearly a third of the AFL-CIO's membership. They've said they want to focus more on organizing. The U.S. economy grew at a solid pace in the second quarter. The Commerce Department reported today the Gross Domestic Product increased at an annual rate of 3.4 percent from April to June. On Wall Street today, the Dow Jones Industrial Average lost 64 points to close below 10,641. The NASDAQ fell 13 points to close at 2184. For the week, the Dow gained more than 3.5 percent; the NASDAQ rose more than 6 percent. And that's it for the News Summary tonight. Now it's on to: The news on the London bombings; the new energy bill; a stem cell update; a Congress overview; and Shields and Ponnuru.

FOCUS - NABBING BOMBERS

JIM LEHRER: Margaret Warner has our capturing of the London bomber story.

MARGARET WARNER: For more on today's developments, we turn to Los Angeles Times reporter Sebastian Rotella in London. Mr. Rotella, welcome, thanks for being with us. How did British authorities zero in on the men arrested in London today?

SEBASTIAN ROTELLA: Thank you, it's a pleasure. It was a combination of evidence and intelligence. Don't forget that they had made a dozen arrests in recent days including a key one, where one of the four bombers who was being sought arrested in Birmingham. There was also monitoring of cell phone traffic that was very important, particularly into capturing the one suspect who was arrested today in Rome.

MARGARET WARNER: All right. Explain the man and the connection with Hussein Osman, the man arrested in Rome today, and how did they actually manage to nab him, or Italian authorities did the very same day?

SEBASTIAN ROTELLA: As far as we can tell, he first hid in Britain as the others did, but at some point three or four days after the attacks he escapes by train through France, to Rome. But he is making phone calls on his cell phone that was already being monitored by the British authorities. So the British pass on the cell phone to their colleagues on the continent, who will pick it up and are monitoring his progress, because the cell phone activates as the train moves. And they key in on him. He was being -- he was hiding at the apartment of a brother he had who lived in Rome.

MARGARET WARNER: Now as you mentioned earlier, some two dozen people have been actually arrested in the past week. How extensive an operation, how extensive a network does Scotland Yard think the 7/21 bomb plot really involved?

SEBASTIAN ROTELLA: Well, that is the classic question about these kinds of terror cases. And oftentimes we assume there's a lot more than meets the eye and that we have to be careful about that assumption. It could be as limited as this group and there is some information today that -- that this group claims that this was pretty self-contained. But the suspicion, obviously, is that there is some kind of coordinator, that there is possibly a bomb maker beyond them, and what we really have to find out about also is the infrastructure. They were hiding. There were a lot of different sort of places they were hiding in Britain and this one in Italy. But it is not clear if we are talking about other terror operatives who were part of a network, or more family and relatives who felt obliged or who were convinced to take them in.

MARGARET WARNER: All right. And another connection question. The men arrested today were all at least African descent. The men believed to be the July 7 bombers were all of South Asian, mostly Pakistani descent. Does Scotland Yard believe these two plots were connected?

SEBASTIAN ROTELLA: That is what everyone tends to think. Certainly there's the obvious similarities of the targets, the methods, the type of explosives. And, in fact, one of the four bombers in the first attack is a convert of Jamaican origin which brings it a little closer to this group of East African dissent. But the London group is very different. As you say, we are talking about people from Somalia, Eritrea, Ethiopia, who aren't born in a country the others were, but who come as children or teenagers and are radicalized really in the London mosque scene. So they're still really looking to see if there is a connection and how it would work. The Pakistani group clearly has connections to Pakistan and to a network that already had been detect approximated in previous cases. They are looking hard to see how they might fit together with this very different London group.

MARGARET WARNER: And also the police warned today, warned the public there would be more police activity. Do they mean they have more work to do just on the 7/7, 7/21 plots or do they think there are other cells planning other attacks?

SEBASTIAN ROTELLA: They have to assume, I think, that there could be other cells, especially if they are operating on the premise that these two were connected and that there is a larger international network manipulating cells in different cities and even individuals in different countries. But there is a lot of work to do because there are so many questions to ask about bomb makers, mastermind, coordinators, connections between the two and so on.

MARGARET WARNER: And finally, and briefly before we go, you broke the story about the arrest in Zambia, you broke the story yesterday of a man named Harun Rashid Aswat. Who is he and why is he considered significant?

SEBASTIAN ROTELLA: He is a very interesting figure who clearly appears to be linked to al-Qaida and has been for years in the London extremist circle in particular, both the British and American authorities are interested in him and are in Zambia trying to figure out who gets him. There was telephone contact between a phone associated with him and some of the July 7 bombers. So there is the automatic suspicion that he could have played some coordinating role. But there are also questions about whether he was using that telephone, and we'll see, obviously, if the Americans end up getting him because they have a case against him that with suggest he isn't considered that significant a figure in the London plot. But he is someone who is very well traveled and the African connection, he has been in Africa in recent years, which is, again, interesting, given what we are seeing unfold today.

MARGARET WARNER: All right. Sebastian Rotella in London, thank you so much.

SEBASTIAN ROTELLA: Thank you.

FOCUS - ENERGY: WINNERS & LOSERS

JIM LEHRER: Now, Ray Suarez has our energy bill story.

SPOKESMAN: The Conference report is agreed to.

RAY SUAREZ: The overwhelming Senate passage of the energy bill today came after years of stalemate. The wide-ranging legislation, which President Bush has sought to pass since taking office in 2001, was approved 74-26. The 1,725-page bill includes $14.5 billion in tax breaks and financial incentives for oil, gas, coal, and nuclear power companies to encourage more domestic energy production; strengthens the nation's electricity grid; and sets money aside for the development of alternative fuels and vehicles that use them. It also includes a provision to extend Daylight Savings Time by one month to decrease energy consumption. Republican Pete Domenici of New Mexico was one of the bill's authors.

SEN. PETE DOMENICI: I can tell you, we will be safer, we will have more jobs; we will have an electric system that is safe and sound. We will have diversity of energy sources and supplies built in our country for us, spending our money, creating our jobs and many more things.

RAY SUAREZ: The House approved the bill by a vote of 275-156 yesterday afternoon. Republicans in that chamber had abandoned a provision that would have given the producers of a fuel additive called MTBE liability protection. Lawsuits stemming from the chemical's contamination of drinking water supplies have been filed in some 30 states. Attempts to raise fuel economy standards for passenger cars or trucks were also rejected for the final bill. During a press conference yesterday, Democratic Sen. John Kerry said the legislation failed to curb U.S. energy demands.

SEN. JOHN KERRY: America has no challenge in this bill to reduce oil consumption by any fixed level whatsoever. Instead, billions of the American taxpayer dollars are going to go the oil and gas and nuclear industries. Americans get no relief at the pump, and we are left in the end more dependent on foreign oil.

RAY SUAREZ: President Bush in a statement released today pledged to sign the energy bill into law.

RAY SUAREZ: Now to tell us what won and what lost out in the energy bill we get two views. Dena Wiggins is a lawyer and energy lobbyist for the oil and gas industry; she's also a member of the Secretary of Energy's Advisory Board; and Philip Clap is president of the National Environmental Trust. Its biggest funder is the Pew Charitable Trust, which also contributes to the NewsHour.

Well, Dena Wiggins, you were telling me earlier you've been working on this for six years. What is this bill designed to do?

DENA WIGGINS: This bill is designed to give the American public a balanced energy portfolio. What this country needs is a balanced energy policy. This bill encourages efficiency; it encourages conservation; it encourages hydro power; it encourages oil and gas production, and, in sum, it is a real win for the American public.

RAY SUAREZ: Philip Clapp, will it be able to accomplish any of the things that Dena Wiggins just ticked off?

PHILIP CLAPP: On the contrary actually, I think it's an admission of paralysis by both the Republican and the Democratic Parties. The Bush Administration, itself, itself estimated that this bill will not increase oil and gas production in the United States at all over the next 20 years. We're facing a very difficult situation. I mean, we had three big challenges: One cut our foreign oil dependence; two, move to move our economy away from its dependence on fossils fuels and develop new technologies; and number three to help consumers at the pump. And it failed on all three.

RAY SUAREZ: Dena Wiggins, is that right, that America would not either produce more or consume less electricity and other forms of energy when this bill takes effect?

DENA WIGGINS: I disagree with that. I think that this bill provides incentive for a variety of energy sources. What we have had in this country for a number of years is a policy that has forced companies and forced our economy to try to run off of one fuel. It has forced us into using natural gas. Natural gas, as I'm my colleague, Phil, would agree is clean burning, it is efficient, it's a wonderful fuel. But we can't run this economy on one fuel. What we need is a diverse fuel portfolio. And that is what this bill is designed to give. And also, there are incentives in here for conservation and for energy efficiency. There are efficient -- there are tax incentives for energy efficient clothes washers. There are incentives in here for efficient refrigerators. There are incentives in here for solar water heaters. There are incentives in this bill, tax incentives for people who want to try to improve their home or to build more fuel efficient homes. All of those things go to helping our country have enough energy supplies. What we really need is to make sure that when -- particularly in the heat of the summer like we're facing right now -- is that when somebody flips the switch, they get the kind of air conditioning that they need. Or in the winter when they flip the switch, they get heat to heat our homes.

You want lights; you want heat, you want air conditioning. This country runs on fuel. And we need a diverse fuel portfolio. And that's what this bill brings to us.

RAY SUAREZ: Speak directly to that issue, that approach of diversifying the portfolio, having sort of a multi-platform approach to American energy consumption.

PHILIP CLAPP: Well, I first went to work on the House Energy Committee 30 years ago. And this bill doesn't change the same policy we have had for 30 years from the Nixon administration, which is a very lopsided subsidization of energy production industries, and it does nothing about demand. It does nothing on energy efficiency.

Out of the subsidies in the bill, you only have about 25 percent of them that go to renewable energy and energy efficiency. And most of those are just extensions of just existing tax credits.

On the other side, our of an $11.5 billion bill you have about 65 percent of that money that goes in subsidies for oil and gas companies, for the nuclear industry, and for the electric utility industry. And all of the Bush administration's own estimates showed that it would not increase one iota production of oil in the United States.

Now we're really heading into a very dangerous period because U.S. oil production is projected to peak in 2009 and decline 25 percent by 2025, over the next 20 years. At the same time our demand is going to go up 40 percent. There is nothing in this legislation -and the most important thing that could have been done is to set new fuel economy standards for automobiles, which is where we really use oil, and that was completely out of the picture. And what we have is the giant amount of subsidies for more production and even the Bush administration says it's not going to generate any.

RAY SUAREZ: Dena Wiggins, those subsidies have attracted the lion's share of the attention about this bill. Don't they subsidize activity that these companies would have carried on anyway, like oil exploration and research?

DENA WIGGINS: What I think we need to do is really put this in perspective. This bill is 1700 some odd pages long. It's a stack of paper on my desk that is about like this. There are subsidies in there for the oil and gas industry, but as I said earlier, there are subsidies in there for other forms of energy as well. And I think that's the important thing to keep in mind.

This is a balanced approach. And Phil was talking earlier about the need to increase domestic oil production. There are things that this bill could have done -- as good as this bill is -- there are things this bill could have done that it didn't do to increase or allow oil and gas companies to help increase oil production in this country. It doesn't open up ANWR or the 1002 Section of ANWR, which is avery small portion of ANWR; it's the size about - the area around Dulles Airport, there is nothing on there in opening up ANWR, and there is nothing in there on allowing increased exploration and production in the OCS. So if that is -

RAY SUAREZ: And the OCS is what?

DENA WIGGINS: The offshore, the offshore area. And if that is where we want to go with increased domestic production of oil, that could have been done. And it's not in there.

PHILIP CLAPP: Well, in reality, it's not -- the opening of the Arctic National Wildlife Refuge isn't in the bill because it is another legislation that the administration is pushing through. But even if you opened up the Arctic National Wildlife Refuge, the Department of Energy projections are that Alaska's oil production, which is about 10 percent of the nation's, will be absolutely flat through 2025 and decline thereafter.

So even if you have done it, you haven't answered the question. The real issue is that we have the same lopsided production side nuclear utility and oil and gas industry subsidies and it is designed only to try to hold U.S. production flat, and we are not making any serious investment in new technologies.

RAY SUAREZ: Briefly what should have been in there in your view? You are criticizing this bill for what it includes and doesn't. What should have been in there?

PHILIP CLAPP: There are several things that should have been in there. First one is the vast majority of our oil in this country and the imported oil is used for transportation, for cars. And that is why consumers are paying so much at the pump. There should have been a serious attempt to increase fuel efficiency for U.S. auto manufacturers. And I include Japanese companies that manufacture in the United States. We have had an actual decline in fuel efficiency; it's dropped from a high of 22 miles a gallon in 1988 down to 20 miles a gallon today. And that's where a huge amount of the increase in our demand is coming. In addition, they could have required the electric utility industry to generate about 10 percent of its electricity from renewable resources, which would have, indeed, stimulated the market for those technologies and that was dropped. And the Bush administration opposed and pushed out of the bill a provision that would require them to submit to Congress a plan to reduce U.S. oil imports by 10 percent by 2015. And they opposed it and took it out.

RAY SUAREZ: Was there enough attention paid to alternative and renewable sources of energy?

DENA WIGGINS: I think so. Currently we only get about 1 percent of our energy supply from what I think you would call renewables. Now there is another 3 percent of our supply that come from hydroelectric. And I don't know whether you would consider hydroelectric power renewable or not; I would. But that is still only 4 percent. I don't know that Congress could have done anything that would have taken that 1 or 4 percent and magically transformed it into 50 percent or 60 percent. This country runs on oil and natural gas. I don't think Congress could have changed that in legislation.

RAY SUAREZ: What's going to be different? We heard what Phil Clapp thinks should have been in there. But you support this bill.

DENA WIGGINS: Yes, I do.

RAY SUAREZ: How does the way Americans buy energy look different in five years or ten years now that this thing looks like it's going to pass?

DENA WIGGINS: I think that this bill will end up with lower energy prices across the board. I think that the increase in the fuel diversity is what we have needed, that gives -- will ultimately lead towards lower prices.

RAY SUAREZ: Thank you both.

DENA WIGGINS: Thank you.

JIM LEHRER: Still to come on the NewsHour tonight, a stem cell update, rush hours at Congress, and Shields and Ponnuru.

FOCUS - STEM CELL PIONEERS

JIM LEHRER: Stem cell research: The statement today by Senate Majority Leader Bill Frist brought new attention to the science of embryonic stem cells. Susan Dentzer of our health unit has been looking at that research. The unit is a partnership with the Robert Wood Johnson Foundation.

SUSAN DENTZER: Even for scientists, they're an odd couple.

JERRY SCHATTEN: So you need to recognize that the primary American contribution to the work in Seoul has been Coca-Cola. Woo Suk lives on caffeine and sugar.

WOO SUK: I love Coca-Cola!

SUSAN DENTZER: Jerry Schatten is a cell biologist and human fertilization expert from the University of Pittsburgh. Woo Suk Hwang is a doctor of veterinary medicine from Seoul National University in South Korea and now an internationally known trailblazer in the field of embryonic stem cell research. Two years ago, these two did not even know each other. But now, they say, they're best friends and close collaborators in embryonic stem cell research. Embryonic stem cells are prototype cells found in dot- sized, several-day-old embryos like these pictured here. They ultimately develop into the different organs, tissues and cells of the body. Research on stem cells is controversial, because obtaining the stem cells and growing them into colonies, or lines, involves dismantling embryos. Schatten says his main goal is to make other scientists in the United States fully aware of Hwang's astounding research in the field.

JERRY SCHATTEN: I am the sherpa, I am the luggage carrier for you, and the work that you do in Korea doesn't occur anywhere else in the world.

SUSAN DENTZER: In early 2004, Hwang's team reported in the journal Science that they'd produced a colony of stem cells derived from a cloned human embryo. The embryo was not made through the normal union of egg and sperm. Instead, it was made by taking a woman's egg cell, stripping out its nucleus and its one set of chromosomes, and then inserting a new nucleus with two sets of chromosomes from another of her body cells. Then, in May, Hwang and his team reported they'd made 11 new human embryonic stem cell colonies. These cells also came from cloned embryos, but this time the embryos were created with egg cells from one woman and nuclear DNA taken from skin cells of nine different people. The skin cell donors had a variety of conditions, including a 56-year-old man with a spinal cord injury, a two-year-old boy, with a genetic immune disease and a six-year-old girl with juvenile diabetes.

JERRY SCHATTEN: It's absolutely stunning how brilliant the scientific advances have been and important the medical implications are.

SUSAN DENTZER: To scientists, the breakthrough was what's called a proof of principle. It showed human embryonic stem cells could be created that were the exact nuclear genetic match of any individual, male or female, diseased or healthy, regardless of age. That creates enormous potential for studying how genes influence disease as embryonic stem cells give rise to other body cells and tissues. And down the road, many scientists hope the research could pave the way for so-called regenerative medicine. That's also the hope of 38-year-old Danny Heumann, who was paralyzed in an auto accident at age 18. Heumann believes that one day genetically matched stem cells could be engineered to grow healthy replacement cells to repair his damaged spinal cord.

DANNY HEUMANN, Paraplegic: If we give scientists a chance to work with embryonic stem cells, I think the promise for somebody like me to someday maybe get out of my wheelchair-- which I call this research the magic bullet-- could be a reality.

SUSAN DENTZER: To make certain Hwang's techniques work, Schatten is now trying to replicate them using monkey cells rather than cells from humans. The fact that he's working with animal cells underscores another aspect of their partnership, the way U.S. scientists like Schatten, who are at the top of their field, are still having to struggle to keep up. The animal cell stand-ins are made necessary by current U.S. Government policy. Four years ago, President George Bush allowed federal funding of human embryonic stem cell research, but only within strict limits. The president spoke about those at a recent White House news conference.

PRESIDENT GEORGE W. BUSH: On Aug. 2001, I set forward a policy to advance stem cell research in a responsible way by funding research on stem cell lines derived only from embryos that had already been destroyed.

SUSAN DENTZER: The policy means that federal funding can only be used for research on 23 authorized stem cell lines, not new ones, like those Hwang's team created. The president has reaffirmed his commitment to those limits. He's vowed to veto legislation recently passed by the U.S. House of Representatives. The bill would allow federal funding for research on new stem cell lines created from embryos discarded from fertility clinics. Today, in a surprise move, Republican Senate Majority Leader Bill Frist broke with the president and also endorsed the bill.

SEN. BILL FRIST: The limitations that were put in place in 2001 will over time slow our ability to bring potential new treatments for certain diseases. Therefore, I believe the president's policy should be modified. We should expand federal funding and the accompanying NIH oversight and current guidelines governing stem cell research, carefully and thoughtfully staying within ethical bounds.

SUSAN DENTZER: Amid the battle over federal policy, individual U.S. states have gone in dramatically different directions in setting their own research agendas. Some, like Indiana, have yielded to opponents' moral concerns and banned the very procedure that Hwang's team used to create cloned embryos. Others, like California, New Jersey, Connecticut and Massachusetts, have expressly authorized state funds for embryonic stem cell research. And some universities, like Harvard, are raising money privately to finance research that can proceed free of the federal restrictions. Schatten says the result of this uneven patchwork is that human stem cell research is barreling ahead in some places and moving more tentatively in others.

JERRY SCHATTEN: It is so hard to do the scientific and the medical research. When you start overlaying the various potholes and razor wire and hurdles that we have not only in the United States but in our individual states, it's understandable why our colleagues in South Korea are able to move so much faster than we are.

SUSAN DENTZER: Schatten and Hwang contend that the U.S. should follow Korea in forging a consistent national ethics policy on cloning and stem cell research. Korea's law effectively bans the use of cloning aimed at producing a human baby by making it a crime to transfer a cloned embryo into a female uterus. On the other hand, Korea's law expressly allows and creates ethical guidelines for the cloning of cells forresearch. And Hwang contends that the cells he clones aren't in fact embryos since they were not created by the normal union of egg and sperm. He calls them instead "nuclear transfer products" and says their probable genetic defects would make it impossible for them to grow into human beings.

SPOKESMAN: I think reproductive cloning, cloned human beings, is unethical, and unsafe, and biologically it may be impossible because if we tried to input a nuclear transfer product into the surrogate mother's womb they never would be a viable human life.

SUSAN DENTZER: Yet these embryos, or transfer products, can clearly produce stem cells, and Schatten says Hwang and his team have practically perfected the process. Now they're teaching it to scientists across the U.S., such as these here at Stanford University.

SPOKESMAN: With the needle still in place, we then lob that pipette against the needle.

SUSAN DENTZER: Hwang says his team's next goal is to get its stem cells to differentiate into many different types of body cells, mimicking what happens in normal human development. Meanwhile, unless and until congress overrides the president, any comparable work on new cell lines will proceed as it does now, either in state- funded or privately funded settings in the U.S. or outside the country.

FOCUS - RUSH TO RECESS

JIM LEHRER: This has been a busy last few days for Congress. The energy bill and the stem cell news were only two of the many happenings. Kwame Holman puts it all together.

KWAME HOLMAN: Even congressional leaders admit nothing motivates members to get their work done like the thought of a long recess.

REP. DAVID DREIER: Every single time the break is approaching, we have the ability, because of that time deadline, to finally bring disparate forces together for success.

KWAME HOLMAN: Knowing they would not return from their August break until after Labor Day, members of the House and Senate this week debated, compromised, and turned out several major pieces of legislation, though not everyone was satisfied.

SPOKESMAN: There's a lot of things that aren't getting done.

KWAME HOLMAN: The House approved overwhelmingly a massive highway bill before adjourning this afternoon. The 1,000-page, $286 billion package sends lawmakers home, bearing money for new roads and bridges and the jobs that come with them.

SPOKESPERSON: Transportation funding is a win-win for everyone involved.

KWAME HOLMAN: Late Wednesday night, house republicans narrowly succeeded in passing CAFTA, a controversial pact increasing trade between the U.S. and five Central American nations, plus the Dominican Republic. Democrats, nearly all of whom opposed CAFTA, charged Republicans secured the two-vote margin of victory only by using improper tactics.

REP. NANCY PELOSI: They were twisting arms, making deals, changing votes. Can you imagine... can you imagine going down there to change your vote? It's just... it's such a humiliation.

KWAME HOLMAN: Meanwhile, over in the Senate Majority Leader Bill Frist pulled from the floor a defense bill packed with more than 200 amendments, including several that would standardize treatment of detainees held by the U.S.

SEN. BILL FRIST: I do look forward to coming back and looking at that bill and passing that bill testimony a very important bill.

KWAME HOLMAN: In its place Frist put up the gun liability bill, drawing the outrage of some Democrats.

SEN. RICHARD DURBIN: Why did we move to this bill and away from the Department of Defense bill to help soldiers and families?

KWAME HOLMAN: The Senate went on to pass the gun bill today, along with the highway and energy bills.

Republican Whip Mitch McConnell:

SEN. MITCH McCONNELL: As we enter into this break I think the American people can be assured that much work is being accomplished on their behalf.

KWAME HOLMAN: Democrats had a different view.

SEN. CHARLES SCHUMER: If you're a worker, to pass CAFTA with no labor protections, you haven't gotten much. If you use electricity or you use gasoline to pass this energy bill that doesn't lower their cost doesn't do very much.

KWAME HOLMAN: The Senate did not act on John Bolton's nomination to become ambassador to the United Nations. Democrats held it up because the White House refused to supply materials relating to Bolton's use of classified information while at the State Department. Today there were signals President Bush may use the August congressional break to give Bolton a recess appointment, lasting 16 months.

SCOTT McCLELLAN: The United Nations will be having their general assembly meeting in September, and it's important that we get our permanent representative in place.

KWAME HOLMAN: Meanwhile, Supreme Court nominee John Roberts continued to meet with the senators who will decide his confirmation.

SPOKESMAN: I'd like to have an opportunity to get a chance to know him personally.

KWAME HOLMAN: Judiciary Committee hearings on his nomination are expected to begin in early September.

FOCUS - SHIELDS & PONNURU

JIM LEHRER: And that brings us to some closing analysis by Shields and Ponnuru: Syndicated Columnist Mark Shields and National Review Senior Editor Ramesh Ponnuru. David Brooks is off.

Much to go through, gentlemen. First, Mark, Bill Frist's statement today on stem cell research, a statement of science or of politics?

MARK SHIELDS: Jim, I will give him the benefit of the doubt in this case; that doing it politically it would have been consistent with his Terry Schiavo, really, when he endorsed essentially long-range diagnosis of her situation and was upgraded by not only members of politics but members of the medical profession. So, but it is a key thing and I will say this, in a city where the press is decidedly pro-stem cell research, it will be regarded as an act of growth on Bill Frist's part, rather than an act of shrinking.

JIM LEHRER: What about among those at the White House and those of the conservative -- Republican conservatives, will it be seen as an act of growth?

RAMESH PONNURU: Well, you know, the interesting thing, you were talking about it being possibly a political decision, if it was a political decision it shows a bit of a tin ear; it's as though he was correcting for the ham-handedness of his intervention in the Schiavo case with a ham-handed intervention on the other side from the perspective of pro-lifers. I think that Bill Frist's political identity is as George W. Bush's guy in the Senate. Now if you want to dissent from Bush in a which to impress Republican primary voters, you might want to say I'm going to be more against big spending than this guy has been, but are you really going to win votes by saying I'm going to be less pro-life than President Bush has been?

JIM LEHRER: So what you are both saying is that this is, giving him the benefit of the doubt, this was a statement of belief, not a statement of politics?

MARK SHIELDS: And I think that if Bill Frist is going to run for president, that he wants to run as a physician rather than as a senator. And I think that will be his credential.

JIM LEHRER: On CAFTA, the measure passed but it only passed by two votes in the House. First of all, why was it so close, why was this a difficult vote for members of Congress?

RAMESH PONNURU: Well, I think that the long-run trend that we are seeing is the collapse of the free-trading Democratic position. Bill Clinton was able to get 102 House Democrats to vote for NAFA in 1993. And now there are only about 15 Democrats in the House who are willing to vote for CAFTA, against just one change of a letter to make a huge difference. And what that means is that every Republican who may be representing a district with significant protectionist interests really sort of has to walk the plank and that is why the Republican leadership was sweating that vote.

JIM LEHRER: Do you agree with Ramesh's analysis that the Democratic position has changed dramatically since NAFTA?

MARK SHIELDS: I think the experience has changed.

JIM LEHRER: Experience -

MARK SHIELDS: I think the experience in NAFTA has had -- you will recall back when NAFTA was first proposed by Bill Clinton. It was guaranteed there was going to cut down illegal immigration in the United States. It was going to raise the middle class in Mexico. It was going to do all sorts of things in terms of trade and growth that were - there was no sector of the economy - in fact it was a win/win situation. Well, 650,000 lost manufacturing jobs later, blame that on China, blame that on NAFTA, the point is that illegal immigration has increased. The trade imbalance has grown.

JIM LEHRER: So that -

MARK SHIELDS: I think there was a sense that wait a minute, you fool me once, shame on you; fool me twice, shame on me. I think there was some of that. And I think, Jim, what has to have concerned the administration is this: When you have to pull out that many stops and offer that many favors to pass what is really a minor trade bill, what does it do for the rest of your trade agenda which is far more ambitious. And secondly, what does it do when you are trying to pass Social Security, which has got to be a lot tougher vote?

JIM LEHRER: Do you agree -

RAMESH PONNURU: If it even happens.

JIM LEHRER: Yes. If we ever get to the Social Security thing. Do you agree with Mark on that?

RAMESH PONNURU: Well, I do think it was a modestly -- a modest trade agreement. But for the same reason because we are not talking about huge consumer markets for business, there wasn't as much interest on the business side in this as there would be on say a global trade deal. So I think that the president has actually gotten a modest boost in his ability to get global trade deal because our trading partners will see that the president can deliver when the crunch comes and maybe next time it will be an easier fight.

JIM LEHRER: The energy bill that passed today, you heard our earlier discussion about winners and losers, what would you add to that, Ramesh, or subtract?

RAMESH PONNURU: Well, actually, the Wall Street Journal made the point that often what people object to in these kinds of bills is they pick winners and losers among industries, but this time they solved that problem by making everybody a winner. Everybody gets a subsidy. The only people who lose are taxpayers. It seems to me that if there has been a crisis of not subsidizing enough energy producers and corporate America, well that crisis is now fully solved.

MARK SHIELDS: I don't argue with. I'd just add this, Jim, that we saw this flurry of activity on the pre-August break, the district work period, I guess, not a break or a vacation. And as Sen. McConnell said and reassured the American people - Congress is at its lowest point inpublic esteem in the past 13 years. And I think that the activity probably reassures people, well, at least they are doing something.

JIM LEHRER: That they can do something -

MARK SHIELDS: But with record gasoline prices and you pass this energy bill, and all of a sudden come the middle of August, and the bill's been signed and there is no change in my gas bill, gasoline price, you know, I don't know if there is going to be much, many applause for this one.

JIM LEHRER: Do you agree --

RAMESH PONNURU: I'm a conservative. I'm reassured when Congress goes out of session, when they leave town, it is more reassuring to me.

JIM LEHRER: Yeah.

RAMESH PONNURU: No, I think that the politics of energy is entirely about the price of gas. And not even the biggest supporters of this bill would argue that it is going to change the price of gas in the short term.

JIM LEHRER: The expectation of the public is hey, we've got an energy problem, we've got an energy bill, and suddenly there is going to be a solution -

MARK SHIELDS: Instead forget it. Why subsidize oil companies that are having record profits? We want to give those folks a little encouragement.

JIM LEHRER: Okay, gun liability. How do you read that one, Mark? We just saw it in Kwame's piece. Sen. Frist pulled off the defense thing because he didn't want the thing on the detainees, I guess. But whatever, he put the gun liability thing in there and it has quickly passed and about to come law.

MARK SHIELDS: The votes were there, Jim. If there is any question that the combination of the political clout of the gun owners and the gun manufacturers was very much in evidence; there was the -- the fear or at least an apprehension among some Democrats and others that Tom Daschle who lost his Senate seat last year when George Bush carried the state by two, he lost by only two, but the reason that tipped him out of office was the fact that as majority leader, Senate Democratic leader he had held up a vote on a final passage of this by loading up amendments that the gun owners and gun manufacturers felt unacceptable. So I think with Harry Reid backing it, there was no question it was going to sail.

JIM LEHRER: That is the big change, of course, the man who replaced Tom Daschle. Harry Reid supported this bill.

RAMESH PONNURU: That's right it is not just that Daschle lost his race. Democrats have gotten burned multiple times by going too far in the direction of gun control. 1994 the assault weapons ban Bill Clinton said it was part of the reason why the Democrats lost the House; 2000 there were a lot of people who say Al Gore could have picked up three states that he ended up losing but for the gun control issue. So I think a lot of Democrats have been pulling back on this issue, and when you talk about these lawsuits against gun manufacturers, which is what, that is an issue.

JIM LEHRER: Explain what that is.

RAMESH PONNURU: Yeah, the idea would be can you hold gun manufacturers liable in a court for crimes committed by -- committed using the guns that the manufacturers made? And those actually -- those kinds of lawsuits have never been popular. They've never pulled well from the moment this became a national political issue. So when you look at the way the gun issue has hurt the Democrats, you look at the polls, a lot of the Democrats said we're not going to fight this fight.

JIM LEHRER: John Bolton, it looks like at least if - you'd have to be an idiot not to figure out the signals that are coming from everybody, Condoleezza Rice yesterday, Scott McClellan today, the presidentis going to do an interim appointment of John Bolton, U.N. Ambassador. What do you think, wise move?

MARK SHIELDS: I don't think it is a wise move. I think Pat Roberts, the Republican senator from Kansas, put it -

JIM LEHRER: Republican senator -

MARK SHIELDS: Yes. Chairman of the Intelligence Committee said that you go there, if not hobbled then at least incomplete without the Senate confirmation -- we added fuel today on the resistance to him when it turns out that he, in fact, did speak and was interviewed by the inspector general of the State Department on the Niger-Iranian business. But the form as submitted was inaccurate. That was the classiest Washington statement that I have seen. Not that he was inaccurate but the form was inaccurate.

JIM LEHRER: Why is this so important to the president, that John Bolton be the U.N. Ambassador? What is your reading on that?

RAMESH PONNURU: Well, I think it's a number of things. I think that the president likes the Bolton approach to international diplomacy.

JIM LEHRER: Rough them up a little bit.

RAMESH PONNURU: He thinks that the role of an ambassador of the United States to the U.N. should be to represent American interests. And he feels that there is too much in our diplomatic culture, too much of a tendency to represent the U.N. to the U.S. And then I think he has been offended by what he regards as some of the unfair raising of the bar that each time some documents are supplied, more documents are demanded. So you know, I think that one thing the people underestimate is the degree to which this president takes personal offense at the way a lot of his appointees or his nominees have been treated.

JIM LEHRER: And in this particular case the votes are clearly in the Senate to confirm him, it's just that the Democrats have blocked the votes. They have essentially filibustered this appointment.

RAMESH PONNURU: That's right. And then you have to wonder, given the way the Roberts nomination in the Supreme Court is going to consume the Senate's time for the rest of this year, do you have the time to force a series of votes when you have a lot of other business to try to break that filibuster?

JIM LEHRER: New subject, Mark. The AFL-CIO split this week. How serious an event is that particularly for Democrats?

MARK SHIELDS: I think potentially it's quite serious, Jim. I think the champagne corks were probably being popped at the Wall Street Journal editorial board and the Bush White House. I mean there is no question that labor has been a crucial part -- just as an example, in the state of Oregon last year which John Kerry carried narrowly by 75,000 votes, labor -- union labor households where there was a union member there had a voter turnout of 91 percent, 91 percent. I mean, that's off the board. I mean that is like some European country or -- democracy. I mean -- and that was just because there was a joint effort involving the two of the unions that just left, the Service Employees Union and the Teamsters as well as United Food and Commercial Workers. And as a consequence of that departure and the split, they can no longer work together legally. I mean the constitution of the AFL-CIO - is the full federal law, so it is potential -- it is a big, big issue.

JIM LEHRER: Do you agree?

RAMESH PONNURU: I do agree. I think to some extent John Sweeney, the head of the AFL-CIO since 1905, is being blamed for events beyond his control. The decline in organized labor has been going on for a long, long time. I don't know if you can really blame John Sweeney or his leadership for that. But they have punched above their weight politically because of the kind of amazing degree of organization they've achieved. And that may now be in jeopardy. If they are going to put more money into organizing which is what the leaving unions want to do, that means they're going to put less money into politics.

JIM LEHRER: We just have a few seconds left. Have either of you picked up anything this week that makes you believe that John Roberts' nomination is in jeopardy? Ramesh?

RAMESH PONNURU: No, I don't think an arroyo toad and membership director of the Federal Society and a French fry are going to keep him from being on the Supreme Court.

JIM LEHRER: Mark?

MARK SHIELDS: I don't think a single Democratic senator has come out against him.

JIM LEHRER: You haven't seen any signs.

MARK SHIELDS: No.

JIM LEHRER: Okay. I have this long list, and you guys get "A's" on everything, because we got through there, thank you both very much.

Good to see you again, Ramesh.

RECAP

JIM LEHRER: And, again, the major developments of this day: Police in London and Rome captured the last of the key suspects in the London bombing attempts last week. The U.S. Senate gave final approval to a national energy plan. And Senate Majority Leader Frist announced he will back legislation to expand funding for research into embryonic stem cells.

JIM LEHRER: And once again before we go to our honor roll of American service personnel killed in Iraq. We add them as their deaths are made official and photographs become available. Here, in silence, are five more.

JIM LEHRER: Washington Week can be seen on most PBS stations later this evening. We'll see you online and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.